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Q3 2018 presentation 8 November 2018 Todays presenters Per - PowerPoint PPT Presentation

DRAFT Q3 2018 presentation 8 November 2018 Todays presenters Per Sjstrand Lotta Sjgren Group CEO Group CFO 1 This is Instalco A leading multi-disciplinary technical installation company active in the Nordic region Focus on


  1. DRAFT Q3 2018 presentation 8 November 2018

  2. Today’s presenters Per Sjöstrand Lotta Sjögren Group CEO Group CFO 1

  3. This is Instalco  A leading multi-disciplinary technical installation company active in the Nordic region  Focus on mid-size projects  Decentralised structure – “The Instalco model” Key financials (LTM) Net sales Order backlog SEK 4,086 million SEK 3,724 million Adjusted EBITA Adjusted EBITA margin SEK 355 million 8.7 % Average no of employees Acquired annual sales 1,958 1,037 National coverage in Sweden, Norway and Finland with strong local positions in key growth regions 2

  4. Q3 2018 Highlights Sales and profitability • High growth in sales and profitability Net sales SEK 998 million • Net sales growth 40.8% • Organic growth 8.6% Adjusted EBITA SEK 74 million • Final stage of upcoming acquisitions Adjusted EBITA margin • Continued strong market 7.5 % • Increased demand for energy efficient solutions with increased sustainability requirements 3

  5. Group development – Net sales and EBITA Net sales growth (SEK million) Adj. EBITA (SEK million) and adj. EBITA margin (%) 120 12% 100 10% 1.9% 8.6% 80 8% 32.8% 60 6% 107 101 40 4% 74 72 69 48 45 20 2% 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 2017 2017 2017 2017 2018 2018 2018 • Q3 seasonally slow due to summer holidays 4

  6. Towards the 2019 financial target Adjusted EBITA 500 450 400 350 300 250 200 150 100 50 0 2015 2016 2017 2018 2019 5

  7. Group development – Order backlog Order backlog (SEK million) • Growth of 42.6% (compared to Q3 2017) 4 500 4 000 • Continued high order 3 500 backlog ratio of 0.9x 3 000 (relative to 12 months 2 500 rolling net sales) 2 000 3 875 3 736 3 724 3 194 1 500 2 611 2 496 2 189 1 000 1 999 500 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2016 2017 2017 2017 2017 2018 2018 2018 6

  8. Examples of projects in Q3 Scaniarinken Södertälje Stora Enso Hylte bruk Mill ORAB  JN El and OTK Klimatinstallationer  Rebuilding of Stora Enso’s existing facility  Renovation of ice hockey facility  Hylte bruk paper mill Scaniarinken Installation of new condensing turbine  Electrical and ventilation system  installations Energy savings  40 percent energy savings  7

  9. Examples of projects in Q3 Billingeprojektet Skövde Sergelhuset Stockholm Tofta Plåt & Ventilation Lidköping Rörgruppen and Ohmegi   Project planning, development and Electrical and plumping installations   installation of new ventilation and control Renovation of Stockholm city quarter  systems in several buildings Subcontract from NCC and Vasakronan  Billingen recreation centre - Skövde  Order value SEK 54 million municipality  Benefit for public health  8

  10. Segment development - Sweden • Continued strong demand Key financials Q3 2018 Net sales • Increasing amount of projects in schools, SEK 719 million pre schools and hospitals • Net sales growth of 35.7% EBITA EBITA margin • Organic growth of 6.0% SEK 72 million 10.0 % • Order backlog growth of 44.3% whereof 3.4% in comparable units Order backlog SEK 2,822 million 9

  11. Segment development – Rest of Nordics • Continued high demand Key financials Q3 2018 Net sales • Stable market SEK 279 million • Low margin due to one loss-making project in Norway – ends in 2018 EBITA EBITA margin • Net sales growth of 55.9% SEK 8 million 3.0 % • Organic growth of 16.1% Order backlog • Order backlog growth of 29.0% SEK 902 million whereof 8.2% in comparable units 10

  12. Acquisitions 2018 Acquisition Discipline Market / Region Estimated yearly sales Acquired (SEKm) Q1 Trel AB Electrical Sweden - North 75 Jan Sprinklerbolaget i Stockholm AB Sprinkler Sweden 77 Jan Vent och Värmeteknik VVT AB Ventilation Sweden - South 18 Jan VVS-Kraft Teknikservice AB Heating & Plumbing Sweden - East 85 Feb RIKelektro AB Electrical Sweden, Norway, 60 Feb Finland Total Q1 315 Q2 Dala Kylmecano AB Heating & Plumbing Sweden - North 31 Apr APC Elinstallatören AB Electrical Sweden – West 50 Apr Teknisk Ventilasjon AS Ventilation Norway 57 May LVI-Urakointi Paavola Oy Heating & Plumbing Finland 100 June Total Q2 238 TOTAL YTD 553 • Two companies (Rörman (est. 33 SEKm) and MSI (est. 100 SEKm)) acquired after the end of the reporting period 11 *For companies acquired in Q2, estimated yearly sales corresponds to reported sales for the latest full financial year.

  13. Financial targets and dividend policy Area Target Comment Acquired sales and EBITA in line Adjusted EBITA pro forma 1 shall reach SEK 450m not later than   with plan the end of 2019 Growth Average yearly organic sales of  The average organic sales growth shall amount to 5% over time  13.6% since 2014 3 , 7.4% YTD Margin Instalco aims to deliver an adjusted EBITA margin of 8.0% 8.7% LTM, 8.0% YTD   Instalco’s net debt in relation to adjusted EBITDA 2 shall not  Capital structure 1.6x in September 2018  exceed a ratio of 2.5 Instalco aims to achieve a cash conversion ratio of 100%,  Cash conversion 83% LTM, 80% YTD  measured over a rolling twelve-month period Dividend policy Instalco targets a dividend payout ratio of 30% of net profit  Instalco’s financial targets set forth above constitute forward-looking information that is subject to considerable uncertainty. The financial targets are based upon a number of assumptions relating to, among others, the development of Instalco's industry, business, results of operations and financial condition. Instalco's business, results of operations and financial condition, and the development of the industry and the macroeconomic environment in which Instalco operates, may differ materially from, and be more negative than, those assumed by Instalco when preparing the financial targets set out above. As a result, Instalco's ability to reach these financial targets is subject to uncertainties and contingencies, some of which are beyond its control, and no assurance can be given that Instalco will be able to reach these targets or that Instalco's financial condition or results of operations will not be materially different from these financial targets 1) Adjusted EBITA including full-year pro-forma consolidation of acquisitions and excluding exceptional items 2) Adjusted EBITDA including full-year pro-forma consolidation of acquisitions and excluding exceptional items 12 3) Based on average organic sales 2015 (26.6%), 2016 (22.0%), 2017 (-1.7%) and first nine months of 2018 (7.4%)

  14. Looking ahead  Favourable market and demand reflected in strong order backlog  Low exposure to housing market  Increasing amount of projects in social properties  Increased focus on energy-efficient solutions and higher demands on sustainability  Still difficult to find qualified workforce 13

  15. Summary Q3 • High growth in sales and profitability • Increased demand for energy efficient solutions with increased sustainability requirements Looking ahead • Final stage of several acquisitions • Slowdown in housing construction but with continued stability in the installation sector 14

  16. 15

  17. Q&A 16

  18. APPENDIX 17

  19. Quarterly data SEKm 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 Net sales 474 599 556 777 689 781 708 935 979 1,174 998 Growth, % 95.8% 97.1% 65.6% 59.7% 45.2% 30.5% 27.3% 20.3% 42.2% 50.2% 40.8% EBITDA 23 49 12 60 38 62 54 96 41 102 70 EBITDA margin, % 4.9% 8.2% 2.2% 7.7% 5.5% 8.0% 7.6% 10.2% 4.2% 8.7% 7.0% Adjusted EBITDA 26 56 16 63 46 71 50 103 74 109 77 Adjusted EBITDA margin, % 5.5% 9.3% 2.9% 8.1% 6.7% 9.1% 7.0% 11.0% 7.5% 9.3% 7.7% EBITA 23 49 11 58 37 61 52 94 39 100 68 EBITA margin, % 4.8% 8.1% 2.0% 7.4% 5.3% 7.8% 7.4% 10.0% 4.0% 8.5% 6.8% Adjusted EBITA 25 55 15 61 45 69 48 101 72 107 74 Adjusted EBITA margin, % 5.3% 9.2% 2.7% 7.8% 5.3% 8.9% 6.8% 10.8% 7.3% 91% 6.8% Adjustments Earn-outs - 6 0 - 4 -16 -9 7 0 4 6 2 0 3 1 2 4 2 1 3 3 1 Acquisition costs - - - 1 1 - - - - - - Refinancing costs - - 1 1 2 20 2 - - - - Listing costs Divestment of subsidiairy loss - - - - - - - - 30 - - Total adjustments 3 6 4 3 8 8 -4 7 33 7 7 Net debt 293 265 210 241 302 346 392 446 493 538 588 Net debt /LTM adjusted EBITDA 2.8x 2.0x 1.5x 1.5x 1.7x 1.8x 1.7x 1.7x 1.7x 1.6x 1.6x Net working capital 35 15 3 -17 -69 -26 15 -1 -14 -24 71 Net working capital (% of LTM net sales) 2.2% 0.8% 0.1% -0.7% -2.9% -0.9% 0.5% 0.0% -0.4% -0.6% 1.7% Order backlog 1,650 1,683 1,911 1,999 2,189 2,496 2,611 3,194 3,736 3,875 3724 Number of operating units at the end 18 19 24 26 31 32 33 43 48 52 47 of the period Average number of employees 1,043 1,082 1,221 1,240 1,466 1,578 1,594 1,666 1,943 2,039 2067 Number of employees at the end of 1,060 1,120 1,257 1,295 1,470 1,590 1,631 1,844 1,985 2,119 2139 the period 18

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